Economy could hurt Amazon, analyst says

But an analyst note published Friday downgrades Amazon’s expected earnings, predicting that consumers would spend less this holiday season because of economic uncertainty.

“We believe Amazon continues to gain e-commerce market share through a combination of category, marketplace and geographic expansion, but we do not believe the company is immune to the current slowdown,” writes Colin Sebastian with Lazard Capital Markets.

E-commerce growth should outpace brick-and-mortar growth, Sebastian said. But, at the same time, retailers are likely to respond to falling consumer confidence with discount prices earlier than usual.

“Online spending trends remain challenging, and may have weakened further since the end of August,” he said.

He also warned about the rising value of the U.S. dollar, which would hurt Amazon’s numbers. (A weak dollar helps U.S. companies by making their products more affordable abroad.)

Another analyst, Mark Mahaney with Citigroup Global Markets, wrote in a note on Thursday that e-commerce sellers are worried about holiday spending.

Online sellers are diversifying their sales, and moving away from eBay, which helps Amazon, Mahaney said. However, sellers will want to increasingly develop their own Web sites to be less reliant on Amazon for sales.

One of Amazon’s biggest risks is “very significant competition from many other companies, including major Internet e-commerce and search companies, multichannel retailers, and comparison shopping engines.”